Analyst: iPhone 5C may exclude Siri, but will boost margins and attract new sales

By , Aug 13, 2013

apple-budget-iphone-margin-chart

For some time, Wall Street investors and Apple watchers have stressed the iPhone maker must adjust to more modest profit margins, as well as a worldwide reality where cheap Android smartphones enable competitors to attract price-conscious consumers. Now comes a voice saying Apple could have it all: a cheap handset, fatter margins and a larger international audience.

By attracting the prepaid market, Apple’s much-expected iPhone 5C will do all that by going after a huge pool of prepaid wireless customers that’s four times larger than the current U.S. subscribers. Meanwhile, another analysts believes he knows the cheaper iPhone will exclude some features, such as Siri…

According to ISI Group analyst Brian Marshall (via AppleInsider), the introduction of a cheaper iPhone (possibly at a September 10 event) would boost Apple’s gross margin to around forty percent, up from the 36.9 percent announced in June and closer to the 42.8 percent from 2012.

iPhone 5C (white, Sonny Dickson 002)

Marshall, who is bullish on Apple stock, believes the dip in gross margins was “forced” by Apple limiting production of the iPhone 4 and iPhone 4S in the face of a migration to lower-end handsets.

Gross margins will also be helped by a lower cost of build and resulting less-expensive price for carriers. It will cost about $160 to build the iPhone 5C and around $340 for wholesalers, Marshall tells investors. In a lower parts price and a more attractive price for carriers, the iPhone 5C will be “crucial,” he said.

That lower build price will likely be due to Apple’s choice of less-expensive components, as well as a decision to avoid some more costly hardware-dependent features, such as the voice-responsive personal assistant, Siri.

“We expect the cheaper phone to have a plastic casing, four-inch display, and lower end internal specs (processor, camera, memory, etc.) than the 5S/5 lineup,” Piper Jaffray analyst Gene Munster told investors Monday.

iPhone 5C (white, Sonny Dickson 001)

“Apple may exclude some software features, such as Siri, which we note was not an option on the iPhone 3GS or iPhone 4 upon launch,” he added. According to Munster, the iPhone 5C would replace the iPhone 4S as the entry-level handset.

Munster expects the iPhone 5C to sell for $300, notes Fortune.

Munster also believes Apple will announce the iPhone 5S at the September event, followed by a large-screen iPhone 6 in mid-2014. The iPhone 5S, Munster says, will initially tap the fingerprint sensor to authenticate users because secure mobile payments via iTunes won’t be ready until 2014.

The resulting array of products will give the iPhone maker a wide range of handsets to offer in new, untapped markets. Among the potential markets Marshall sees as “glaring holes” in Apple’s carrier partners are China Mobile with 740 million subscribers and Japan’s 62 million subscribers.

Apple CEO Tim Cook has made repeated trips to speak with China Mobile leadership, the most recent just a couple months ago.

Images of the white iPhone 5C back housing via Sonny Dickson.

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  • Stefano

    My opinion is, very unlikely.

    • Antzboogie

      Pointless without Siri.

      • Gorgonphone

        Living out silly would be ridiculous

    • shar

      apple would be making a mistake of relying on the royalty of the name “iPhone” which is gradually loosing ground. without distinctive features, it could turn out like another iPad mini, and not capture as many audience as it intends too.

      • Antzboogie

        What are you talking about you were right until the iPad Mini part lol. The Mini is great to me and sometimes better then an over priced iPad which is way too big for my taste, Plus Siri was included in mini so no comparison there.

  • Sokrates

    Even though it’s out of plastic, this phone looks quite amazing.

    • Stefano

      I think it will stay. Apple revolves around simplicity.

  • Linton Findlay

    i bet theyll exclude the 5C from major ios releases to make you want to buy the more expensive ones. at this rate im tempted not to get the 5s(coming from 4s) since i dont really see the point of the finger print sensor, high res screen and NFC are gonna have to be there for me

    • Johnathan Jennings

      Why would they make it not update with the rest of the iPhones? That’s stupid. Apple will keep updating the 5C for 2 years at least so people can have a cheap phone that is up to date. After those 2 years if the customers want iOS 9 then they’ll have to buy the new 7C

      • Linton Findlay

        it will allow them to cut costs trying to make a product that will last a few years of updates, i think theyll release a cheaper iphone every year just that itil just stay on the software that it came with

      • Johnathan Jennings

        Nope. Shitty Android does that. Not Apple.

      • Linton Findlay

        apple doesnt make cheap products but look at the iPad mini and the 5c. theres a reason updates dont go to all android devices, its because it costs money, why wouldnt apple do the same, they will obviously want to keep people wanting to buy the better phones

      • Rowan09

        No Apple doesn’t do that, the 3GS can go to 6.0 + not sure about 7 so why would they make a new phone lesser than a 3-4 year old phone? The reason Android doesn’t have the most updated software on all their phones is because of the individual companies control when customers receive an update and some of the hardware can’t handle the new software. This is one reason why people buy the Nexus or Googles versions of premium phones to get the updates right away.

  • Gorgonphone

    lol iphoneC will be the ipod touch 5G with a cell phone built in and with no siri..lol what a mess just like ipad mini and it will again be perfect for women and kids who dont care

    • Antzboogie

      A mess like iPad Mini? Lmao not everyone wants a huge tablet the size of a binder. My iPad mini was worth every dollar.

      • Gorgonphone

        No it wasnt it has old slow ipad 2 specs amd no retina all it had was a beautiful design and for factor

      • Rowan09

        A mess means no sales, once something sells no matter what it is, it’s just genius. If I can package shit and it sells I’m a genius and its definitely not a mess (no pun intended).

      • Gorgonphone

        Yeah cook and ive are goin to make sure apple starts packaging and selling shit and that is whats sad

      • Barry

        If it’s not made by Steve, you don’t like it, right?

      • Gorgonphone

        If it sucks i dont like it

      • n0ahcruz3

        Ipad mini size is perfect. But the price is unreasonable considering the display is not retina and they used old processor. A lot of people are realizing this thats one of the reasons ipad sales were down. Plus some are opting for phablets.

    • Rowan09

      People complain the iPhone is too expensive, they are suppose to come out with one and people still complain. The 5C isn’t for countries like the US in which I live with horrible telecommunications contracts. It’s for the overseas less developed, poorer countries. If you don’t want it don’t buy it. If you notice most Androids being sold are subpar, featureless phones so the cheaper version of the iPhone can’t have all the things as the premium version.

      • Gorgonphone

        If its not for the use then they should only annouve it in the markets that it is for … Lol fact is the iphone c is for every market to grab the low end segment which is fine but now the high end iphone needs true upgrades the s model thing will no longer cut it

      • Rowan09

        Everyone does an S model they just don’t call it that. The S3 to S4 is an “S” model upgrade. Apple couldn’t get away with naming an iPhone, iPhone 6 when it’s really just an slight (S model) upgrade. People hail the S4 as the best thing since slice bread but its just a few internal and slight screen upgrade. I even heard all the software features on the S4 will soon come to the S3. Apple wouldn’t exclude the US on the iPhone cheaper version, there are poor people here too.

  • rosssimpson

    When do you think the iPhone 6 will come out? What month of 2014? My contract ends July 2014 for my 5, might have to buy out a little earlier if it’s before then!

    • Sokrates

      Certainly not before July 2014. Probably August/Sept 2014

  • Hyr3m

    “C” for crap ?
    “C” for cheap ?
    “C” for cable ? (as in “you don’t get one in the box”)
    “C” for camelot ? (as in “hey you guys with the sh*tty jobs, you can have an iPhone too”)
    “C” for cucurbitaceous ? (as in “looks curvy, sounds shallow”)
    “C” for curry ? (*comment about indian people that most douches will think of as racist-here*)
    “C” for cryogenics ? (as in “using this, you’ll feel like it’s just been woken up from cryogenic sleep because of how obsolete it already is”)

    Help me out people ^^

    • Linton Findlay

      classic, as in a callback to the 3g iphone
      or colour since all the leaks have shown various colours

      • Sokrates

        Classic would be a good move

    • Piyush

      c for cool

  • Derp

    Most people are embarrassed to use Siri in public. You look like a pretentious fool talking to your phone as if it’s a human being

  • Raddi

    i hate the analysts. No Siri sounds stupid like hell, does any analyst think before he posts something this stupid? The iPhone 5C will likely be an iPhone 5 in a new case, so why no Siri??

  • n0ahcruz3

    Why would they exclude siri? Are they going to put A4 chip on the iphone C (or whatever they want to call)? Siri is just a gimmick anyway. Apple is going to have a hard time in the BRIC nations especially china, where smartphones costs below $200 and has bigger screen HD displays and quad processors. iPhone sales are low except in the US.

  • Ram Dasika

    lol if the article is true apple is bound to meet its end. low end phone?cheap plastic?low specs? no siri? these analysts are pretty weird they think Asians are stupid enough to buy such a waste n tasteless phone just because some west famous company made it and they think that apple has the same craze in Asia as it does in America which is pretty big a mistake they are thinking that we will stand in lines for hours just to buy this stupid cheap phone lol we also have our tastes and a lot of our local brands like micromax,huawei etc are already giving phones at low end with specs like quadcore processor and 8 mp cameras under sub 250 $ range what makes these guys think people will leave home made low cost efficient products to some cheap plastic “made in China” product and one interesting point to note is made in China products in countries like India are considered lowest of low people will not even think of buying cause some of them imei numbers are banned in India simply cause they r made in china lol pretty high dreams without proper market understanding

  • Andy

    Well, seeing as how even the latest iPod touch released last year has Siri, it wouldn’t make sense to remove Siri from the iPhone 5C.

  • Cesar D

    Personally i do not use Siri and i think a lot of people will not use in iPhone 5S too, so i think this is a great idea

  • Beck Hoefling

    The whole idea of a budget iPhone is unreasonable. Apple is not a cheap brand and people expect top quality. I would rather buy the discounted iPhone 5 then a new cheap model with less features

  • Matthew Cooper

    People will kill themselves if this happened to just be the 5S casing and not the buget iphone

  • https://twitter.com/MrElectrifyer MrElectrifyer

    Typical Apple, this just might make jailbreak more popular and Siri ports too…

  • Matt Taylor

    Until a JB is released anyway!

  • Dante Arellano

    Well people don’t buy iPhone just cux it’s no chip they won’t but music or movies in iTunes they won’t buy more devices like $1000 laptop they use androids cux it’s chip so Apple do you want make all chip like the another’s????

  • Yunsar

    I don’t think they would put an A4 chip on it, it’s probably an A5 which means it should have Siri.